BUSINESS RESPONSIBILITY (CSR)
“Our biggest challenge this century is to take an idea that seems abstract—sustainable development—and turn it into a reality for all the world’s peoples.” Kofi Annan, former UN Secretary General.
One of humankind’s greatest challenges this century will be to ensure sustainable, just and balanced development. The needs of current and future generations cannot be met unless there is respect for natural systems and international standards protecting core social and environmental values. In this context, it is increasingly recognized that the role of the business sector is critical. As a part of society, it is in business’ interest to contribute to addressing common problems. Strategically speaking, business can only flourish when the communities and ecosystems in which they operate are healthy.
Corporate social responsibility (CSR) is “The contribution that a company makes in society through its core business activities, its social investment and philanthropy programs, and its engagement in public policy” (Wineberg & Rudolph, “CSR-What Every In House Counsel Should Know”). Paul Hohnen (2007) in his guiding book said that Social responsibility (is the) responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behavior that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behavior; and is integrated throughout the organization. CSR concept is very popular nowadays and more interesting tools to make a better development (sustainable development).
It is hoped that businesses and other organizations interested in implementing the CSR. Sustainable development and CSR are moving targets that cannot be fully “achieved” by one-time activities and decisions. Businesses—and other organizations—should approach CSR as a process of continual improvement, being constantly alert to new issues and considerations. The challenges of sustainable development and market developments imply that a firm could adopt the CSR today and face new challenges and opportunities tomorrow.
Responsible Business is Good Business
There is growing recognition of the significant effect the activities of the private sector have—on employees, customers, communities, the environment, competitors, business partners, investors, shareholders, governments and others. It is also becoming increasingly clear that firms can contribute to their own wealth and to overall societal wealth by considering the effect they have on the world at large when making decisions.
Business opinion polls and corporate behavior both show increased levels of understanding of the link between responsible business and good business. Also, investors and financial markets are beginning to see that CSR activities that integrate broader societal concerns into business strategy and performance are evidence of good management.
In addition to building trust with the community and giving firms an edge in attracting good customers and employees, acting responsibly towards workers and others in society can help build value for firms and their shareholders.
Profit-Maximizing in CSR
On the other hand, company can face the CSR as a tool to get profit-maximizing. Recent theories of CSR assert that firms engage in “profit-maximizing” CSR. That is, companies are assumed to be socially responsible because they anticipate a benefit from these actions. Examples of such benefits might include reputation enhancement, the ability to charge a premium price for its output, or the use of CSR to recruit and retain high quality workers. These benefits are presumed to offset the higher costs associated with CSR, since resources must be allocated to allow the firm to achieve CSR status.
“Our biggest challenge this century is to take an idea that seems abstract—sustainable development—and turn it into a reality for all the world’s peoples.” Kofi Annan, former UN Secretary General.
One of humankind’s greatest challenges this century will be to ensure sustainable, just and balanced development. The needs of current and future generations cannot be met unless there is respect for natural systems and international standards protecting core social and environmental values. In this context, it is increasingly recognized that the role of the business sector is critical. As a part of society, it is in business’ interest to contribute to addressing common problems. Strategically speaking, business can only flourish when the communities and ecosystems in which they operate are healthy.
Corporate social responsibility (CSR) is “The contribution that a company makes in society through its core business activities, its social investment and philanthropy programs, and its engagement in public policy” (Wineberg & Rudolph, “CSR-What Every In House Counsel Should Know”). Paul Hohnen (2007) in his guiding book said that Social responsibility (is the) responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behavior that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behavior; and is integrated throughout the organization. CSR concept is very popular nowadays and more interesting tools to make a better development (sustainable development).
It is hoped that businesses and other organizations interested in implementing the CSR. Sustainable development and CSR are moving targets that cannot be fully “achieved” by one-time activities and decisions. Businesses—and other organizations—should approach CSR as a process of continual improvement, being constantly alert to new issues and considerations. The challenges of sustainable development and market developments imply that a firm could adopt the CSR today and face new challenges and opportunities tomorrow.
Responsible Business is Good Business
There is growing recognition of the significant effect the activities of the private sector have—on employees, customers, communities, the environment, competitors, business partners, investors, shareholders, governments and others. It is also becoming increasingly clear that firms can contribute to their own wealth and to overall societal wealth by considering the effect they have on the world at large when making decisions.
Business opinion polls and corporate behavior both show increased levels of understanding of the link between responsible business and good business. Also, investors and financial markets are beginning to see that CSR activities that integrate broader societal concerns into business strategy and performance are evidence of good management.
In addition to building trust with the community and giving firms an edge in attracting good customers and employees, acting responsibly towards workers and others in society can help build value for firms and their shareholders.
Profit-Maximizing in CSR
On the other hand, company can face the CSR as a tool to get profit-maximizing. Recent theories of CSR assert that firms engage in “profit-maximizing” CSR. That is, companies are assumed to be socially responsible because they anticipate a benefit from these actions. Examples of such benefits might include reputation enhancement, the ability to charge a premium price for its output, or the use of CSR to recruit and retain high quality workers. These benefits are presumed to offset the higher costs associated with CSR, since resources must be allocated to allow the firm to achieve CSR status.
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